The Effects of Fiscal Measures During COVID-19

Abstract

Countries worldwide launched wide-scale fiscal support measures to mitigate the unprecedented output losses caused by lockdowns aimed at flattening the COVID-19 curve. This column examines the effects of fiscal policy measures during the pandemic, using a novel database of daily fiscal policy announcements and high-frequency economic indicators for 52 countries from January 1 to December 31, 2020. The authors find that fiscal policy announcements have been effective in stimulating economic activity, boosting confidence, and reducing unemployment, but their effect varies by the type of measure and the stage of the pandemic.